Pennies to the Press

Why the Government Should Be Subsidizing Journalism

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If you’ve tried to read stories from outlets such as the New York Times, the Washington Post, or the Wall Street Journal as of late, you’ve probably encountered a paywall featuring a message similar to this. Annoying as it may be, however, it has become an unfortunate necessity for the news organizations of today.

American press as we know it is dying. Ad revenues have dropped by nearly 57% since 2003. News organizations are responding by increasing sponsored content pieces and imposing paywalls in an attempt to reclaim revenue (much to no avail). Now, the free and independent press America has come to know and take for granted is at risk. Fortunately, there’s a solution the US government can take to protect modern journalism and ensure access to the news: directly subsidize the press.

Sound crazy? Believe it or not, America has been providing forms of press subsidies for almost as long as the press itself has existed.

Geoffrey Cowan is a distinguished communications professor at the University of Southern California. In February of 2010, he explained:

“It is a common myth that the commercial press in the United states is independent of governmental funding support… There has never been a time in U.S. history when government dollars were not helping to undergird the news business.”

Indeed, from the Postal Service Act of 1792 to the Postal Reorganization Act of 1970, the government has actively subsidized the press in various ways for centuries, and still does today. These subsidies have been crucial for the success and sustainability of American news media. However, in a time when the press has needed them the most, subsidies have vastly diminished.

Press subsidies have declined in two ways. The first is in a decrease in the value of postal subsidies. The primary form of press subsidy is a subsidization of the cost of postage for newspapers, provided through legislation such as the Postal Reorganization Act of 1970. The logic behind the subsidies is sound; reducing the cost of postage can reduce overall costs for news companies and help to keep them afloat. However, as news media has markedly shifted from print to television and the internet, and the overall circulation of newspapers has decreased, so too have the savings generated from a postal subsidy. The number of newspapers per 100 million people has dropped by roughly 66% since 1970, which, due to the reduction in postage, eliminates 66% of the cost savings which postal subsidies produce.

Second, adjusted for inflation, the amount of money allocated for press subsidies has decreased. Adjusting for inflation, the value of postal press subsidies has fallen from $1.97 billion in 1967 to a mere $288 million in 2006, more than an 85% drop. As a result, while subsidies covered 75% of all postal costs for news organizations in 1971, as of 2006, they now only cover 11% of the costs.

Federal tax breaks and FCC-sponsored free cable licensing for broadcast news networks have attempted to supplement previous forms of press subsidies, but these new subsidy methods have failed to keep up with the needs of the news industry. Old methods of subsidy are no longer working. In order to ensure news media can survive in the modern day, the press needs to be directly subsidized.

The biggest concern of opponents to direct press subsidies is the possibility of the government using them to manipulate the press. After all, even a press without money is better than a press without freedom. However, in the 224 years of the history of American press subsidies, never has freedom of the press been put at risk.

This might be because attempting to control or subdue the press, even in the slightest of ways, is a politically indefensible act. Take Donald Trump for example. He and his campaign have led an attack on news media so persistent and vitriolic that there now exists a documented litany of aggressive actions and statements which have been perceived as threats to media independence. Unsurprisingly, thepresshashadafieldday calling him out on it, declaring Trump and his candidacy threats to freedom of the press. Ezra Klein of Vox has even gone as far as to posit that Trump’s subtle threats to control the media are a primary reason why mainstream press coverage of Trump has remained so consistently negative, which may, in turn, explain why polls have consistently failed to turn in his favor.

Trump shows us what we already know: you don’t mess with the press. To attempt to control the media is to alienate and infuriate one of the most powerful forces in modern politics.

However, as low as the risk of government control is, press subsidy programs should always work to keep that risk at an absolute minimum. David M. Schizer, former Dean of Columbia Law School, wrote in a 2011 article that the first pillar of success to any press subsidy program is the safeguarding of media independence. The aforementioned Geoffrey Cowan further contends that to minimize this risk, subsidies should remain indirect, ensuring against the possibility of the government allocating funding on a case-by-case basis not by necessity, but by political expediency.

In order to grant direct subsidies to press organizations while avoiding the threat of government control, funds would have to be indirectly channeled through an independent organization which somehow still remained accountable to the government. Fortunately, the US government does have such an organization at their disposal: the Corporation for Public Broadcasting. Federally funded through the Public Broadcasting Act of 1967, the CPB is a non-profit organization currently responsible for distributing federal funding to over 1400 locally-owned public radio and television stations. As the funding agent of the Public Broadcasting Service, as well as the producer and distributor of National Public Radio, the CPB already has a reputable record for promoting good journalism and effectively financing news ventures around the country. The organization is autonomous and well-removed enough to distribute funding without government bias, while still remaining accountable enough to do so in a responsible manner.

A subsidy system funded through the CPB would have to have some set guidelines. Cowan notes that, where possible, government funding should be distributed according to a predetermined formula. This way, biases and discrepancies in funding that would otherwise appear in a system where funding amounts are decided on a case-by-case basis could be eliminated. Schizer furthers in his 2011 article that subsidy programs should be focused on what he calls “externality-generating activities”. He states, “For example, a subsidy that induces press organizations to hire more reporters is superior to one that can be used, instead, to fund pay raises for the advertising staff.”

Additionally, a subsidy system should emphasize the needs of independent news organizations, such as the New York Times and Washington Post, over directly-supported sources, such as the Center for American Progress Action Fund’s ThinkProgress. Further, funds should be set aside in order to provide grants to legitimate startups in order to promote journalistic competition, and ensure freedom of the press not just for the giants of today, but for the budding journalists of tomorrow.

Implementing such a subsidy system would require a slight alteration of the CPB’s function and organizational structure, and more money to boot, but these small changes could preserve American press as we know it. A press made not of sponsored content, but of journalism and analysis unfettered by corporate interest. A press which tears paywalls down, bringing the people’s access up. A press made finally, truly, free again.